Tuesday, March 09, 2010

Gold Selling

The Problem

Last week Big Bear Butt issued a call for Blizzard to end Prohibition and start selling gold to players. The theory is that by offering players a safe and legal method of purchasing gold, Blizzard will greatly damage the economic incentive of hackers and goldsellers, reducing the damage that hacked accounts are doing to the game.

I am reluctantly forced to agree with him that gold should be sold through legitimate channels. I have never bought gold. I regard purchasing gold as a form of cheating. But the truth is that there is apparently a significant segment of the audience who is willing to purchase gold. To satisfy that need we have people who hack accounts, secretly install keyloggers, and do much damage to innocent players. If selling gold directly would significantly reduce the number of hacked players, then it would be worthwhile.

There have been two options suggested: players selling gold to players; and Blizzard selling gold to players. Each method has pitfalls, and at the end I will make a suggestion on what I think the best course of action would be.

Solution 1: Players Selling to Players

There are three major problems with Player-To-Player transactions that I see. First, it gives players a significant incentive to defraud other players, especially as the fruits of the fraud result in real money. Imagine a GM or officer making off with the guild bank to sell for real money. Even in day-to-day transactions, the incentive will be to take the most valuable option. In random dungeons, always roll Need on gear so you can sell it. I think that setting the players against each other in this fashion is not good for a casual game like WoW. In a hardcore PvP game like Eve Online, it might be acceptable or even necessary, but it would not be good for WoW.

The second problem I see is that it has the potential to get the IRS and the government involved. I see no good coming from having the IRS interested in my game playing. Anytime something involves real money, the government has an interest and tends to interfere. The academics who think virtual worlds are important might feel validated at the sign of government interest, but I don't want to end up filling out Section A, Subsection B: Income Earned From Virtual Currency Trading on my tax forms.

The third problem is that I believe it is wrong for strong players to get a "free ride" at the expense of weaker players. If players can sell gold to other players, the good players will pay for their subscriptions by selling gold to weaker players. So essentially, the weaker players are paying both subscriptions and are the ones who are actually supporting the game.

In Magic Online, this phenomenon was called "going infinite". Players had to supply packs of cards to enter tournaments, and the prizes were additional packs of cards. A good player would win tournaments, and the prizes would pay her way into the next tournament. The only people who were actually paying for the game were the losers. I don't think this behaviour is healthy for the game in the long run.

Right now, everyone pays an equal amount to access the game, and that is fair and sensible. Creating a division between sellers, who play the game for free, and buyers, who end up paying for everything, will cause nothing but problems.

Solution 2: Blizzard Selling to Players

There are two major issues with Blizzard selling gold directly to players. First, Blizzard can be undercut by the illegal gold sellers. A significant number of players will buy from Blizzard, but there will probably be enough people who go for the cheaper prices. This may or may not be a big problem.

Second, incentives matter. This is just as true for corporations as it is for individuals. If Blizzard sells gold, then selling gold becomes a revenue stream for them, and they have a strong incentive to increase that revenue stream as much as possible. I really don't want to see game design decisions that encourage the player base to buy gold instead of bettering gameplay. For example, the drop rate of Frost Lotus was recently increased, bringing down prices. Would you trust Blizzard to make the same decision if they stood to gain money as people bought gold to compensate for higher prices?

Maybe the Blizzard of old might have made the best decision for the game, but Activision certainly won't. Not if the other path results in increased revenues in the short term.

My Solution: Charity Selling to Players

My solution would be to have Blizzard sell gold to players and donate all money generated to a charity. Not just the profits, but all the revenue. Blizzard can pay for it out of the decreased Customer Support costs.

This would remove any incentive for Blizzard to maximize gold selling revenue at the expense of gameplay. They wouldn't really care if players buy gold or don't buy gold. The charity might care, but it would have no power to do anything.

Secondly, it would provide a powerful incentive for players to purchase from Blizzard instead of illegal gold sellers, even if the illegals undercut Blizzard. On one hand, your money can go to people who hack accounts. On the other hand, your money can go to charity. I think that making the choice starker, and adding extra moral weight to the choice we want people to take, would lead to more people sticking with the official sales.

As well, this would avoid consumers protesting that Blizzard is being excessively greedy. Gold selling would be seen as something completely separate from subscriptions. The divisions between sellers and buyers would not occur.

Of course, this option is extremely unlikely to happen. It's hard to imagine an MMO company allowing its virtual currency to be sold, but giving up all revenue from it, especially if the amounts were non-trivial.

33 comments:

I will most likely expand upon this in more detail in a blog post of my own sometime soon but there is another option that is a hybrid of what you say are the 2 options.

This method is already implemented and proven to work in another MMO. Yes that MMO only has 300K subscribers getting it to scale is the only issue.

I am referring to the PLEX setup that EVE-Online has. For something similar to work in WoW a complete overhaul of the Auction House would be needed. For it to work buy and sell order would need to be able to be processed not just sell orders as the current incarnation of the AH provides.

The hybrid option is Blizz sell in game time codes that are usable in game to add time to an account. These in game items would then be trade-able across the AH and be BoA for purposes of in game mail.

This would make the $ -> Gold conversion a function of the server market and not a straight ratio. Also bound by some law of supply and demand.

There is a major problem that I have not seen discussed yet with regard to Bliz selling gold. Inflation. If Bliz simply puts more gold into the economy the real purchasing power of the gold goes down. This means the price of every item on the AH goes up. So players will be forced to buy gold to purchase items. Works out well for whoever is selling the gold. Not so much for the people buying it. Right now this isn't an issue with illegal gold sellers since they can't actually produce currency. They are not adding currency to the market, simply shifting it around in the market.

The alternative is that Bliz sells gold without adding currency to the market. This means they have to increase the rate at which they remove currency from the market so they can put currency back into the market to produce as close as possible to a zero net sum change. Right now the way they accomplish this is primarily repairs and taxis. Imagine 10g to fly from Org to Crossroads. Tanks already have relatively massive repair bills. If Bliz wanted to avoid inflation they would have to significantly increase that.

Bliz already has a very fine tuned economy and they work very hard to keep it that way. I don't see how selling gold legitimately could do anything but force the average player to spend more than $15 per month. That is how you lose players.

The only thing I can see coming from this is a ridiculous inflation, and the introduction of more gold sinks to the game. With a safe, reliable, and moderately inexpensive way to purchase gold, I do believe more and more people will be partaking in buying gold.

As someone who wouldn't want to buy gold from anyone (Bliz included), I would be among the group of players this change would hurt the most. From a personal standpoint, this sucks. From a game and company standpoint, I'm not sure. It would probably help them in the long run, but hurt the common player quite a bit.

imo, leave gold buyers to reap what they sow. If they get hacked, that's their own damn fault.

While I agree that I think this would lead to inflation and it is not something I would like to see happen,

"imo, leave gold buyers to reap what they sow. If they get hacked, that's their own damn fault."

Seems a bit off the mark. My account was hacked and I have never bought gold. As a matter of fact, of the people that I know personally who have been hacked, I don't think any of them have ever bought gold.

I think the idea is good, but maybe not for gold, as EBGreen said it will just inflate the AH.

Maybe a slightly better idea is to look at what most people who buy gold use it for, and sell that for real money instead. $25 for a token you can trade in for epic flight training, $10 for a Primordial Saronite or whatever. (And make the Primordial Saronite you can buy with real money BoP, to stop people buying them then reselling on the AH.)

It shouldn't matter what gets sold, mounts, even gear perhaps, (like the epic rings sold in Dalaran) but as long as it's BoP it won't inflate the AH, if anything Saronites will be cheaper, and people won't need to buy that much gold anymore.

But I felt BBB starting scenario felt very false at the time but I didnt feel anything would be gained by disputing it. Just because you have a authenticator does not mean you should completely neglect other security methods. After all the exact same methodology that gave them access to your wow gold would also give them access to your bank accounts in real Life if you use Internet Banking. In addition when all the members of a small group are hacked I would be looking for a single point of failure. Ie shared logins/computers. A script on the guild website etc.

Dont make the rest of us Pay for others stupidity, dont support gold selling in any form.

I have to say that I don't really understand the concerns about inflation. Inflation from gold selling already exists now in the current game.

Albert has a paladin with 50k gold. Albert gets hacked and the 50k gold is transferred away. Albert petitions Blizzard for a character restore. Blizzard gives him 50k gold. 50k gold just entered the economy as a result of gold selling. May as well skip the middle steps of having an account be hacked.

CHARITY for gold. This is the finest idea I have heard about any subject in a long time. Rohan, good on you.

A minor minor quibble - when a company passes on "all proceeds" to a charity, that is entirely fair and reasonable. They're going to get charged transaction fees if they take credit card payments for this, so if you mean for this system to pay for itself rather than costing Blizzard a ton of money every day, then 100% of the profits is how it should be done. Companies often do things that cost them money up front if it will make them money in the long run, of course, but even then they tend to avoid internalizing any specific costs like the plague.

So like I said, this is a fantastic idea, and I hope someone from Blizzard is forwarding a link to your post around the office right now. Well done!

I fail to see why it is necessary to allow selling gold at all. There are people currently using illegal bots to level toons, should all restrictions be lifted on them too? And if you are going to do that, might as well make every toon level 80 with the latest and best of everything upon creation, getting them there anyway would just be a matter of spending the dollars. Allowing the legal buying of gold would destroy this game more than the current making it easier and easier to get gear already has. I say no to selling and buying gold in any way, shape or form.

@Rohan A good solution for that would be to stop restoring hacked accounts. You have to be a special sort of stupid to get your account hacked in the first place. Why reward stupidity by replacing everything?

silntbob: The problem that's trying to be addressed is not that there's too much gold floating around, that's a more minor issue, though still worth discussing of course. The main issue is that the selling of gold from non-blizzard sources is encouraging the hacking of accounts.

Going back to the prohibition example... there are always going to be people getting drunk, or in this case buying gold. But it's a better idea to make this small thing legal and support it in the system, in order to get rid of the larger crimes happening in the background, namely hacking.

I'll demand a god-mode spell. It'll use a reagent bought by real world money but will one-shot every raid boss. If they start selling gold, they add a short-cut to the whole economy system in WoW. There is no point in not adding a short-cut to the other content too.

And please, make my char level 85 the day Cata comes out. Here are my 10 bucks. I'm not interested in questing "again".

It is funny to read the range of feelings that come from gold buying. First of all, you all site the economy, it is a game, who cares about the economy. If gold were to be able to be purchased, gold would be meaningless and you wouldnt have to worry about inflation because what is the point? there is a gold cap of individuals so the drive to inflate prices would be kept in check.

I have not bought gold, but have been very tempted. I am a tank, thus heavy repair bills. I do not always have the time to farm gold, play AH or whatever. There are lots of times I only have time to hop on, raid, hop off and that is it. Would it be easy mode for me if i were able to purchase gold or would it actually let me enjoy the game and not sweat if I don't have money for repairs/upgrade gems/enchants.

I personally hate the fact that I have to worry about gold/economy in a game that you are supposed to be able to wind down and relax on. I play the game to get away from real life, not have a virtual real one.

The individuals wanting to buy gold are not always the ones that want the game to be easier, in some ways just probably want it to be less time consuming. Being a 3 night a week raider, family man and having a career can be a lot to juggle, and gold farming for a lot in that situation is the thing that gets dropped off the priority list to allocate time for real life matters. You let gold be purchased where the lure of having the gold cap or whatever else becomes meaningless and the prices would adjust.

Sorry, had lots to say here, but this is an issue that I think the objectors are more so being elitist than looking at all facts. Some people just want to get on, do their raid/heroic or whatever and get off to deal with other things, not devote their life to the game and have to grind all day to be able to joust raid/heroics for consumables/repairs.

@silentbobYes, there are things you may do that put you at a high risk for getting hacked. The problem is, there is a large amount of the population that get hacked from various scripts that are more discrete. By not restoring hacked accounts, you can pretty much assume that player will never play again.

@AnonymousThe economy in the game is a big draw for a lot of players. Just because it isn't a big deal for you doesn't mean other players shouldn't or won't care. Many people keep playing because of the AH, and eliminating that part of the game is going to lose customers for Blizzard.

I like the idea of Blizzard selling gold for charity, but I can't seem to get past the excessive inflation legal gold purchases will cause. Despite the hacking inflation we see now, there are a lot of people who don't buy gold now because of the EULA.

"You have to be a special sort of stupid to get your account hacked in the first place."

I was hacked. I don't believe I am a special kind of stupid. I am an IT consultant. I get paid by very satisfied customers. Security is a portion of my business. On my home computer I have anti-virus software installed. It is functioning properly. My account was hacked sometime during an 18 month hiatus from the game for me. When I came back the account was locked because the hackers had been using an exploit to farm herbs with it.

I think that you are painting with broad strokes here and that for the most part you are just plain wrong. Yes, some people make mistakes that get themselves hacked. I have known a few people that have been hacked (granted this was before authenticators existed) and none of them were particularly stupid.

I agree with EBGreen. I've been hacked too. I'm an IT specialist also, and my machine is pretty much a fortress. Before I got hacked, I had some strong prejudices about getting hacked also. So when it happened, it was mostly my ego that got hurt. I've never bought gold or even considered it. Making gold is part of the game and actually fun, hence the 120k gold I have now.

From the 9(!) scanners I tried, including things like rootkitrevealer and a linux boot CD scanner, my machine turned out completely clean. I'm still using the same install up till today, I din't reformat on purpose. Never got "hacked" again.

So, explain to me how they got my account information, even while I hadn't played wow for three months back then.

A) Remember, there are 2 places where people can get the passwords from. B) if a good hacker wants something, he'll get it: hence the hack that even works with authenticators.

In my case I might happened when I did a forum post from my work machine, which I considered to be very well protected also (low user right f.e.). But can you honestly call something like that a mistake? or stupid? Some undoubtedly will, if only to not admit they're wrong, but there's a big difference between doing something you should be able to do and being stupid. It's stupid when you click on email links, or respond to in game wispers asking for passwords, or: buy gold. Everything else should be possible without having to live in constant paranoia.

Gotta disagree with the gold selling idea. Other people have mentioned a major byproduct of sanctioned gold selling: hyperinflation. My guess is that so many people would be buying mass quantities of gold (after all, how many more upstanding Azerothian citizens would buy gold if we could do it safely and without breaking the ToS?) that the auction house would become essentially unusable for people who DON'T buy. Then there's a new problem -- player attrition -- because there are many of us who will play this game for $15/month but won't do it for $30. Not to mention, how cheap will Blizzard have to make gold before it's no longer profitable for the gold sellers to undercut them? Every dollar cheaper is that much more currency in the marketplace and that much more inflation.

You'll quickly have a situation where everything that can be bought with gold will be bought immediately by a significant portion of the player base. In game performance will be affected by how much real money people spend on the game and what quality of stuff they can afford to buy. Flasks, high level crafting mats, and top end crafted gear will become inaccessible to people unwilling to spend real money on it.

Ultimately, Blizzard will have to re-evaluate what can be bought with gold, and my guess is the economy will be restricted to fluff, with all the useful items becoming BoP and purchasable only from NPC vendors with non-tradable badges. Who knows? This might happen anyway as authenticators become compromised and more and more of Blizzard's revenue gets tied up in account hacking issues.

Your giving your credit card, your email, your personal details perhaps even sufficient information to identify your IP, to a company that by the very nature of the business is not reputable. You are also possibly aware that the gold you are buying comes from people that have been hacked and you are hopefully aware its a bannable offence against the terms of service.

If Blizzard where selling gold. Your buying off the blizzard store at the same time you pick up a pet. Blizzard wont hack you, you wont get banned if found out and heck its even going to charity, perhaps you could add it to your tax return.

Your saying their would be no additional gold buying in that second scenario and no additional inflation caused. By the way my understanding from people who have been hacked is the don't always get the gold back from blizzard anyway. Just the items.

There is a simple solution, seperate servers where people can buy gold on. EQ2 does this, they are called Exchange servers. You cannot transfer between these servers and normal ones, so the economy from the ability to buy gold is restricted to these servers.

Separate servers is the best solution that I've heard yet. Bliz already has issues with faction balance and fragmenting the population further would only exacerbate this I feel, but that would be a minor effect compared to Bliz selling gold.

This entire discussion is of course predicated on the assumption that gold should be sold at all. Personally I don't agree with this assumption. It is purely my opinion, but I feel that saying "Gold can already be bought illegally so Blizzard should just sell it legally" is akin to saying "People already rob convenience marts, so convenience marts should just give their money away". Blizzard designed the game a specific way and gold selling was not part of that design or else this would already be a micro-transaction game.

@ Rohan "I have to say that I don't really understand the concerns about inflation. Inflation from gold selling already exists now in the current game."

Actually in the example you outlined, Blizzard does not inject another 50K into the economy when the hacked player's account is restored. The trace all gold transfers that were done from the hacked account and remove all gold distributed. Purchases that the gold-buyer made with the hacked gold from even innocent players is removed from those players. Therefore, no gold is added to the system when the hacked account is restored.

As for your idea of gold for charity, this system would still lead to hyperinflation and Blizzard being forced to create further and further gold sinks into the game to remove excess gold from the system. In addition, you would just create two classes of players — the "haves" and the "have-nots" based on how much money players could afford to spend to play. The "haves" could end up controlling much of the economy merely through their ability to out-buy everyone else. Mats, recipes, high-end crafting materials would end all restricted to the players that could afford to buy them with real money. Want to raid? Forget it unless you could shell out the big bucks.

Lastly, this opens up the whole slippery slope of undesirable consequences. Why not allow botting or power-leveling or buying your characters then if gold-buying is allowed?

1. Should gold be sold in game?2. The demise of the current in game economy if gold is sold in gmae.3. The amount of real life money you are willing to spend to be a top level player.

Here is a little scenario for you. Blizzard sells gold to players. I spend lots of rl money and get a whole buttload of gold in game. Now I can do whatever I want. I can buy up all the top end mats in ah or pay players lots of gold to run me through content... Get the idea? With enough money I can become an in game superman there will be nothing that is out of reach if I throw enough cash at it.Personaly I like WOW and the challenge of the in game economy it adds another level to the game. Adding gold to the game would ruin it for more than 1/2 the population and I bet many would leave because they could not spend real money to get in game stuff and would get tired of being outclassed by those that can. I spent 20 levels where I did nothing but play the ah and do one quest per day. I made 20,000g in those 20 levels. So don't be lazy just spend 5 minutes a day in ah and you will have enough gold to do whatever you need.

Like the previous poster said you would get 2 classes the haves and the have nots.

for a guy that works 24/7 and friday night finds some time to play yes, we should sell wow gold as for the bots gathering it... i'm not happy with that but it's 2010:work is for tractors and those eldorados that hack the wow accounts.

"You have that now. The difference is its those who have time are the haves and those who don't are the have nots."

This is true to a certain extent (although Blizzard is doing more with every patch to change this). The difference in my opinion is that right now, people that put more effort into playing the game benefit from that effort. I feel this is different from benefiting purely from having a larger RL wallet.

I don't raid. I doubt that I will ever raid just because RL doesn't afford me the opportunity to do so. I don't begrudge the folks that can and do spend their time and effort improving their position in the game though.

Personally I think most gold is gained from farming instead of hacking. Why? As one of the posters said, everytime someone with 50k gold gets hacked, 50k gold is added.

This would create massive inflation if so many players were hacked everyday. I don't deny that players are being hacked, but I think most accounts are good for maybe 3-4k. You have to hack a lot of accounts to be able to provide 20k in such a case.

It's much more likely that gold sellers make their gold by automated farming because that can be done without people being involved so it can run 24 hours a day. It's also a lot cheaper, because if you figure out one way to farm without getting caught, you're only limited by computer capacity.

I don't think Blizzard should ever start selling gold. Why?Imagine someone with 10 characters on a server witch are goldcapped. That would be crazy, and effect the economy. Everyone would get so much gold that basically things could just be free in WoW. One might aswell make the monthly fee a bit higher and all stuff in game free.

I fully agree with EBGreen's comments. Selling gold would disrupt the game economy and it would increase rifts in player wealth, mirroring their ability to pay real cash for the fake stuff. I believe the solution is more aggressive investigation and reduction in the illegal gold vendors.

Our discussion is largely academic since Bliz is quite proud of the balanced economy they have created and work hard to maintain that balance. Legalized gold selling just doesn't fit their vision of the game.

I too am frustrated at times about not having the gold I need to get the things I want, but I strongly believe that introducing gold into the realm would have about the same effect as when Germany printed cash to pay their restitution after WWII... the average citizen couldn't afford food and cash was cheaper than firewood.

One thing I think would be interesting is to introduce lending into the bank or as a learn-able profession. Some lending like that already occurs amongst trusted friends, but imagine if the game could automate the repayment like a garnishment... just brainstorming here, but it could be interesting. A small game-set interest rate or negotiable rate maybe? Could be a solution to solving people's short term gold needs. Credit ratings based on historical rate of income and previous repayment? Hmm... might work...